The three types of analysis of the foreign exchange market :


In the forex, to predict the direction of the foreign exchange market trends and to implement trading strategies, different analyzes are carried out. There are three main types of forex analysis, technical analysis, fundamental analysis and market sentiment analysis. Let's look at it in more detail.

Technical analysis

The technical analysis is based on the study of technical charts. If it is relatively simple to master your rudiments, it is the experience that will make you a good analyst. It is based directly on price trends, on raw information, unlike technical indicators that add a mathematical dimension to highlight other information.

Fundamental analysis

Fundamental analysis is based on the study of the impact of global economic events. Indeed, currency pairs generally fluctuate according to different announcements made by governments of all countries. To the extent that these announcements are known in advance and the trends are relatively cyclical, traders can make predictions about future developments of the pairs they are trading.

The analysis of market sentiment

Economic publications are numerous but only a handful of them really have an impact on the foreign exchange market. In addition to this, traders tend to operate by obsession ie that for a while, a burning subject makes the news and waves the currencies of the market. Last important example to date is the brevity of this summer. Generally this lasts a while and then the trend changes, much like fashion in short. To analyze the feeling of the market is thus to take the temperature of the moment and try to take advantage of this particular atmosphere before the latter returns to normal.

If many traders say that technical analysis is the most reliable and effective, it is not our opinion. At forex.fr, we believe, in fact, that to obtain the best predictions it is important to master each one of them and to use them in a complementary way.

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